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Leave the Sign OnProper signage is key to your marketing plan

Article-Leave the Sign OnProper signage is key to your marketing plan

Leave the Sign On
Proper signage is key to your marketing plan

Most experts will agree that a business isn't worth a dime without the right kind of sign, and self-storage is no different. How else can a customer find your facility? In fact, because storage is a micro market in which a majority of customers come from within a five-mile radius, an effective sign can play a major role in attracting tenants. It's true that not everyone driving by your facility is looking for storage space. But when the time comes for that person to rent a unit, a good, properly placed sign at your facility may have made the right impact on his memory, and you may just top his list of storage possibilities.

The elements of signage may not be as simple as one might imagine. Unfortunately, there are the inevitable wrestling matches with zoning boards; decisions over color, lettering and lighting; and problems of placement. Let's begin with the basics.

Name-Calling

Careful thought should be given to the name of a facility. An easy-to-remember name is the safest solution. Make it easy for customers by using logic. For example, if your facility in on Maple Street, how about Maple Street Storage?

Jim Chiswell of Williamsville, N.Y.-based Chiswell & Associates, says he's surprised at the lack of savvy marketing some owners use when naming a facility. Choosing a name that ties into the community some way is an effective tool for attraction and advertising, he says. "The sign is the final part of the directions to your facility," explains Chiswell. "If you have a unique facility name, such as 'Speedway Self-Storage,'--the name of the street the facility is on--you could put a checkered flag on your facility. Or maybe name it 'Water Tower Self-Storage,' after the 40-foot water tower in the back of your facility."

Also, make sure the sign is coordinated with the same information that a customer will find when browsing the Yellow Pages. This way, they will make an immediate connection. You want your advertising dollars working for you, not against you, right?

Size Matters

Here's a simple one: How big should your sign be? Of course, bigger is better, but be careful of zoning regulations. No doubt they will play a role in how big your sign can be. Don't wait until after you've invested into an extravagant, monolithic sign before contacting the city department. Call the planning and zoning department and ask to speak directly to the sign inspector, who can give you the dimensions and other sign regulations for your facility's area.

Location, Location, Location

The key to the location of your sign is to put it on a visible streetfront, easily seen by driving motorists. Again, zoning ordinances will most likely dictate where the sign can be placed. Look at nearby businesses to get some clues. If they have huge signs perched on the street, chances are you'll have the same luxury.

If the facility is on a main street and set very close to the sidewalk, you may get by with painting the name directly on the office or another structure. If the property rests alongside a freeway, a tall sign visible to those drivers may be a good promotional tool.

"I always put my sign right out front, if possible, on the busiest street. Hopefully I can put up a secondary sign--usually wall-mounted," says Daryl Flaming of the Tierra Corp., a multiple facility operator based in San Diego, Calif.

For a facility that's located near--but not on--a main drag, consider negotiating with a local business owner on the main street to post a directional sign on his property with the name of your facility and an arrow to lead traffic in the right direction.

Another idea--albeit a sneaky one--is to post temporary signs, similar to those used by real-estate agents promoting model homes or politicians promoting their campaigns. These temporary signs can be strategically placed during busy weekends to pull in a nice chunk of business.

One word of caution, though: Temporary signs can infringe on zoning regulations. If posted illegally, the facility owner may receive a warning, possibly a citation. Nontheless, some facility operators post the temporary signs anyway, reasoning that a small fine is well worth it if they generate enough rentals. Be aware that some jurisdictions levy heavy fines on businesses that abuse sign ordinances. According to Martin Lorch, president of BPI Capital Management in Phoenix, one Arizona municipality charges $2,500 for each day an illegal sign is posted--including temporary signs, which are in violation of city code.

Another piece of advice: Don't post signs at the risk of offending community members. Remember that everyone is a potential customer. If you upset too many members of the community, you may wind up out of business. Therefore, consider posting directional signs on the weekend when they're less likely to be nabbed by zoning officials, then retrieve them before Monday morning.

Lorch encourages self-storage owners and operators to take any advantage of signage that area authorities allow. "In the mini-storage business we have so few media in which to promote ourselves, so signage is very important," he says. "You need to maximize the amount of sign you have. If the city allows you to have wall signs, put them up. If they'll allow you to put up signs on both sides of your property, put them up."

Sign Design

Keep the design simple, with an easy-to-read typeface, a limited amount of information and a concise message. Remember that people have to read within the time it takes to drive by the facility.

The words "mini-storage" or "self-storage" should be the most prominent feature on the sign so customers can make an immediate connection. The only other information necessary for the sign is the phone number, and that's only if space and zoning regulations permit it.

Lorch says certain areas won't allow signs to contain any sort of advertising, including stating the facility has such amenities as climate control or security measures. For example, in one city, Lorch knows of a facility that was forced to rework a new sign because it contained simple, descriptive words.

"They said you couldn't have any advertising copy, meaning you can have your logo and the words 'self-storage,' but you can't say 'all units alarmed or climate-controlled" Lorch explains.

How about color? The right color can make the sign stand out bright as day. The wrong color can fade into the rest of the neighborhood. Generally speaking, yellow is often a standout color, but not if the rest of the street's signs are already yellow. Why not walk the street of your facility and take an inventory of colors used, choosing one seldom or not used? Stick to primary colors; pastels are too pale and earth tones are too mundane. To make the lettering stand out, consider using contrasting colors, such as black or red letters on a white background.

Although it's important that the sign be seen, Chiswell believes it should blend into the surroundings somewhat, and likes signs with a solid background and white lettering, making it easy to read both during the day and at night. "I don't know if I'd put a neon sign in the middle of Nantucket Island, for example," he says. "But you don't want it to be just another sign." Chiswell suggests driving in the area of your facility, especially at night, to get a visual landscape of the other businesses in your area. In some places, he says, it may be smart to offset the sign a foot or two deeper onto the property than others on the street. Even though it's not closer to the roadway, the visual appeal of being different makes the sign stand out from the group.

Finally, for franchises or facility chains, uniformity of colors and graphics play an important role in customers' recognition of the business.

Lighting

If zoning gives the green light on lighting, go for it. A backlit sign is a must to attract attention at night, and it should be lit from dusk to dawn. Electronic timers can take the burden out of having to consistently remember to turn the sign on and off.

One bone of contention for neighbors, however, may be that a too-bright sign creates light pollution in the neighborhood. This shouldn't be a problem in commercially zoned areas, but in residential areas, cities can be strict on lighting. According to Mel Holsinger of Tucson, Ariz.-based Executive Self Storage Associates Inc., one of his facilities near Tucson is restricted from using lighting because it is located on a designated "scenic corridor." "We can't have a lighted sign, period. End of discussion," he says.

A Sign of Change

Many business owners have found that using a reader board can draw more attention to their location because people driving by look and read the messages displayed on the board, especially if they're changed frequently. These changeable signs may be used to promote the business, such as a grand opening or special giveaways/promotions. They can also be used as advertising for community events such as the Boy Scouts' Scout-A-Rama or church bake sales. It's also the perfect spot for offering holiday cheer, or announcing a wedding anniversary or birthday.

Chiswell agrees and thinks reader boards are under-utilized in the self-storage industry. They're a perfect way to promote your facility through advertising and get the attention of civic leaders in a different fashion, he adds.

"Fifty percent of the time, a reader board should be used to promote something going on in the community or some holiday," explains Chiswell. "Promote something for the volunteer firefighters, Girl Scouts or local church bazaar, etc. What you're doing is soliciting community and civic organizations, using your name. That's going to be brought up to their board of directors or committees and, all of a sudden, your name is used in a non-sales environment with all these people from the community and they will discuss it."

Other Possibilities

A conventional sign is not the only way to attract attention. Don't overlook the possibility of using banners for grand openings, special promotions, auctions, etc. But don't forget to consult your zoning restrictions. And once you've used the banner for awhile, don't forget to take it down. If it's faded or ragged, it reflects poorly on the facility.

Other attention-getters include illuminated awnings, an American flag flying high overhead and an exceptional landscaping job, like freshly mowed grass, trimmed hedges and a lots of fresh flowers.

"You can't ignore the physical appearance of the facility as a sign," relates Chiswell. "I see facilities that are just gorgeous; some have won landscaping awards and are very attractive when someone is considering renting. They know the facility because they drive by it everyday."

The Price

Expect to pay at least $500 for a good sign. If you're shopping for an illuminated and extremely large sign, cost run as high as $20,000 or more.

Despite the costs, don't even consider using a homemade sign. You may save a bundle in supply fees, but you will likely lose on the rental side of things. Nobody wants to rent from an unprofessional-looking business.

Give 'Em Something to Look At

While tackling a municipality zoning board may be no fun, getting a good sign at your facility is of utmost importance, especially considering that the majority of your tenants will probably be drive-bys. If you give them something to look at, whether it be an expensive back-lit pole sign, or a clever phrase on your reader board, they may just be your next customer when they're in the market for storage.

White Rabbit

Article-White Rabbit

White Rabbit

i021te.jpg (12793 bytes)The caterpillar was an enigma to Alice--abrupt, rude, perplexing. She found him hostile and revolting, though I remember being entertained by his antics. Recalling this childhood narrative--with all of the more mature connotations I was not to understand for several years--makes me wonder what must have gone through the minds of the owners of one Phoenix facility when informed by officials that a clandestine methamphetamine lab had been discovered in one of their units. What a trip (no pun intended, of course). And who prepares for that sort of thing? Unless it's happened to you or someone you know, dealing with unexpected crime and all of its repercussions is like stumbling down the rabbit hole.

When we were contacted about this story, I admit I chuckled at first. Not because I found it humorous, but because it took me a bit off guard. It hadn't occurred to me that a tenant would run this sort of operation out of a self-storage facility, but then--how clever. It amazes me what owners deal with sometimes. You have to be prepared for anything.

Angela Kiper shares her experience with drug-related crime at her facility, and how the situation was handled. There were several elements to consider--both legal and environmental. She also provides a list of warning signs to be alert for, as well as things you can do as owner/manager to prevent crime at your own facility.

This is our show issue. Those of you attending the Inside Self-Storage Expo in Las Vegas will be looking for products and services to boost your business. As a supplement to all of the marvelous options you'll find on the show floor, we've included in this issue a special marketing section, aimed at assisting owners and managers in making the most of their marketing budget. In addition to having the perfect doors and locks and the right management software, it's important that you think about such things as Yellow Pages ads, signage, promotions and publicity.

In addition, we have a full line up of insightful articles: Industry expert Mike McCune shares his insights on the state of real-estate, the effect of overbuilding and the direction of financing. A one-on-one interview with Clark Hotard of Overhead Door Corp. can be found. Finally, learn how to close the deal with prospective tenants, as well as how to use total climate control in your facilities to gain a marketing edge.

As always, we urge you to come visit the Inside Self-Storage booth at the Rio Suite Resort & Casino during the expo. Introduce yourself. Give us your suggestions, opinions and insights. We always welcome feedback from our readers. And don't worry--we're much nicer than that caterpillar.

Best regards,

Teri L. Lanza
Editor
[email protected]

The State of Real EstateChange, overbuilding and the future of self-storage

Article-The State of Real EstateChange, overbuilding and the future of self-storage

The State of Real Estate
Change, overbuilding and the future of self-storage

By Michael L. McCune

It has been a year since I last explored the real-estate aspects of self-storage in depth in this publication. The momentum of the last millennium has carried the self-storage industry to new heights and in new directions. The question, of course, is: What does the first few years of the next millennium hold for the industry as it relates to real-estate values and liquidity?

One word comes to mind: change. It is apparent that many of the constants we have known (or thought we knew) in the past are now changing, and these changes will have a dramatic impact on the value of our investments. The major question that we must come to terms with is: Are these changes simply the continuation of the ever-present cycles of our previous experience, or are they systemic, thus rendering our past experience invalid to judge the future?

Let's begin our exploration by gathering some facts about the current market, hoping to get some perspective for the future.

Overbuilding

We all know that one of the single largest issues affecting the self-storage industry, both in regards to cash flow and investment values, is the impact of potential overbuilding. Unfortunately, the magnitude of the problem is not well established. There are no reliable, national numbers available on new facilities being constructed, and those numbers that are reliable are usually developed for aspecific site.

However, despite the fact that the magnitude of the problem is difficult to quantify, it does not mean that over building does not exist. As owners look at their own markets and submarkets, there is substantial, anecdotal proof that overbuilding is becoming a serious problem. Overbuilding, as we have explored before in these pages, can have a material impact on rental rates, occupancies and overall real-estate values. (For two articles on this topic, visit www.selfstorage.com.) Clearly, we are in the phase of the market cycle where overbuilding is occurring. The question is just how significant is it to the individual owner and to the overall market.

Financing

We know from talking with friends in the financing business that not many of you are currently seeking refinancing. We are all aware that sales have gone up substantially from the lows of 1998. Thus, "sticker shock" of higher rates and optimism that interest rates will go down have probably caused many to sit on the sidelines waiting for better times.

Unfortunately, we see some troubling signs for those who will need to refinance in the intermediate term--say 24 to 36 months. First, because of the lack of business lenders are seeing, many of these "conduits" are beginning to leave the business. While a couple of really good lenders remain, it certainly means less competition at borrowing time. We also hear that many local banks are increasing their underwriting standards and are less likely to consider the facility on its own merits, but rather will place more reliance on the credit of the owner, i.e., net worth apart from the project. Secondly, overbuilding will reduce rental rates and occupancies on some, if not many, projects. This fact, combined with higher interest rates, will cause a reduction in the amount a lender is willing to loan on a project. There have been several individual situations where refinancing cannot liquidate the existing first mortgage because the combination of declining rental rates and occupancy along with increasing interest rates simply does not provide the lender with sufficient coverage to make the same loan.

The prudent owner with an intermediate term financing decision should consider "locking up" available financing while there is competition in the market and money is available so your project can support loan-to-value ratios sufficient to refinance the existing debt. You can always refinance again if the rates go down.

Changes in the Industry

Now that we've hit the millennium mark, we find the last century had more changes than the previous 900 years. On Jan. 1, 1900, how many people would have believed there would be more horseless carriages than horses; children would spend 38 hours per week watching TV or on the computer; one could fly from New York to San Francisco in four hours; or that only 3 percent of the population would work on farms? And certainly no right-minded person would have believed people would pay $100 per month to rent a storage shed, especially when you had a perfectly good barn.

The point of all of this is simply to say the rate of change is increasing and will impact our embryonic industry as well as the rest of the economy. This change will create opportunities as well as challenges. While we tend to think of conventional overbuilding as our single most difficult issue, the future may define obsolescence as our greatest challenge.

Take a moment to think about a couple of changes that are becoming visible, if they aren't already important. Drop-off storage is a great example--the providers are still working the bugs out, but if they find the right formula, the industry could change dramatically. The Internet also provides many interesting opportunities. For example, if (and granted it's a big "if," but so was TV in 1945) the Internet really does become the principle method of marketing self-storage, will location still be the single greatest marketing tool? Obviously, the successful owners and operators will be those who keep ahead of these changes and react accordingly. Carefully monitoring the value of your investment will be even more important in the future.

It's difficult to see into the future very far, but we have attempted to peek around the first corner of the new millennium. What we find are some short-term "bumps," most of which we have seen before and will likely see again. However, we also see the shadows of greater changes further into the next century (maybe even just the first decade) and know that we must be alert and responsive to the changes.

Michael L. McCune has been actively involved in commercial real estate throughout the United States for more than 20 years. Since 1984, he has been owner and president of Argus Real Estate Inc., a real-estate consulting, brokerage and development company based in Denver. In January 1994, Mr. McCune created the Argus Self Storage Sales Network (ASSSN), now the nation's largest network of independent commercial real-estate brokers dedicated to the buying and selling of self-storage facilities. For more information, call (800) 55-STORE.